CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF STUDY

The demand of maritime and transport logistics service has increased overtime in the oil and gas sector in Nigeria. Maritime transport which is also called water borne transport is one of the modes of transportation of goods and /or persons, which has for centuries been the main prerequisite for trade transactions between nations and regions, and has without doubt, played an important role in creating economic development and prosperity (Igbokwe, 2001).

The maritime industry occupies a very prominent position in the economies of nations all over the world. The industry in its strict sense embraces all business activities which take place within the maritime environment. These includes offshore economic activities such as fishing, salvage, towage, underwater resource exploitation/extraction, and onshore economic activities in ports, shipping activities, ship construction, repair and maintenance; of all these, shipping stands out as the greatest boost to a nations economic growth and international status. This is because all other maritime activities revolve around shipping. The oil and gas sector, for instance depends on shipping, as it is the vehicle that drives it, enabling it to make all the difference in an economy. Due to the close link between shipping activities and economic development, most nations cannot afford to toy with the industry (Ndikom, 2011).

Shipping as one of the world’s most international industries makes seaborne trade in a sense at the apex of world economic activity. As business has become more international, and newly industrialized countries have taken their place alongside the Organization for Economic Corporation and Development (OECD) countries, the maritime industry has provided the vehicle for an extraordinary growth of trade. This has also led to the progression from a world of isolated communities to an integrated global community (Stopford, 2003). Shipping is a complex industry and the conditions which govern its operations in one sector do not necessarily apply to another. In terms of its main assets, the ships vary widely in size and type. They provide the whole range of service for a variety of goods, whether over shorter or longer distances. The shipping market is made of the liner shipping, tramp shipping, bulk shipping, the charter market etc. And because shipping is a service industry, ship demand depends on several factors including price, speed, reliability and security (Stopford, 2003).

        Maritime and transport logistics is essential to the proper operation of any country’s economy and a vital part of a nations transport infrastructure. A minister of transport in the federal republic of Nigeria was once quoted to have said that transport is to the Nigerian economy what the artery is to the blood circulation (Igbokwe, 2011).

1.2 STATEMENT OF RESEARCH PROBLEM

The demand for the maritime and transport logistics service is very important to the economic development of any nation; the maritime industry has contributed the distribution of goods especially petroleum products round the globe. But there are some problems facing the maritime industry; for example the operations and services rendered to users within the confines of the operating environment have not been satisfactory due largely to lack of shipping policy and some government policy inconsistencies. Shipping operations and services have over the years been dominates by foreign shipping companies and vessels of which Maersk-line is inclusive. Therefore, a critical analysis of the challenges and opportunities facing these shipping lines and services in Nigeria is very important. Also many factors like the management of bunker, activities of pirates, application of information and communication technology, safety practices and ship turn round time affect the growth and survival of a shipping line. Some shipping lines know this fact. While some have taken the lead in innovating trends that would help them overcome these challenges, others sit with no attempt to innovate; still waiting for the changes to blow them away.

1.3 AIMS AND OBJECTIVES OF STUDY

The main aim of the research work is to analyze the demand for maritime and transport logistics service in the oil and gas sector of Nigeria. Other specific objectives of the study are:

1. to determine the contribution of the demand of maritime and transport logistics service to the distribution of petroleum products and the level of productivity in the NNPC oil and gas, Port Harcourt
2. to determine the effect of the services of the maritime industry on the economy of Nigeria
3. to determine the relationship between Nigeria custom service and the performance of the maritime industry in the oil and gas sector of Nigeria
4. to examine the WTO rules and its effect on the oil and gas sector of Nigeria

1.4 RESEARCH QUESTION

The study came up with research questions so as to be able to ascertain the above stated objectives of the study. The research questions for the study are stated below as follows:

1. What are the contributions of the demand of maritime and transport logistics service to the distribution of petroleum products and the level of productivity in the NNPC oil and gas, Port Harcourt?
2. What is the effect of the services of the maritime industry on the economy of Nigeria?
3. What is the relationship between Nigeria custom service and the performance of the maritime industry in the oil and gas sector of Nigeria?
4. What are the WTO rules and their effect on the oil and gas sector of Nigeria?

1.5 STATEMENT OF RESEARCH HYPOTHESIS

Hypothesis 1

H0: the demand of maritime and transport logistics service does not influence productivity in the NNPC oil and gas, Port Harcourt

H1: the demand of maritime and transport logistics service does not influence productivity in the NNPC oil and gas, Port Harcourt

Hypothesis 2

H0: there is no significant relationship between the maritime and transport logistics service and the economy of Nigeria

H1: there is significant relationship between the maritime and transport logistics service and the economy of Nigeria

1.6 SIGNIFICANCE OF STUDY

The study on an analysis of demand for maritime and transport logistics service in the oil and gas sector of Nigeria will be of immense benefit to the NNPC station, Port Harcourt, the state and the federal government of Nigeria, the maritime industry and other researchers that desire to carry out similar research on the above topic as the findings of the study will educate the Nigeria oil and gas sector on the importance of the maritime and transport logistics services, the contribution of the maritime industry to the economy of Nigeria in terms of employment generation, transportation of crude oil, and other petroleum production both on domestic bases and international, and the challenges faced by the maritime and transport logistic industry in Nigeria. Finally the study will contribute to the body of existing literature and knowledge in this field of study and provide a basis for further research

1.7 SCOPE OF STUDY

The study on an analysis of demand for maritime and transport logistics service in the oil and gas sector of Nigeria is limited to NNPC station, Port Harcourt. The study will cover the Nigeria oil and gas sector on the importance of the maritime and transport logistics services, the contribution of the maritime industry to the economy of Nigeria in terms of employment generation, transportation of crude oil, and other petroleum production both on domestic bases and international, and the challenges faced by the maritime and transport logistic industry in Nigeria.

1.8 LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work

1.9 DEFINITION TERMS

MARITIME: connected with the sea, especially in relation to seaborne trade or naval matters.

LOGISTICS: Logistics is generally the detailed organization and implementation of a complex operation